Banks and their customers already have access to infinite information sources; what they need is a way to pull in critical intelligence while keeping out the superfluous and irrelevant. This need becomes even more acute as the financial services industry consolidates. Financial powerhouses are determined to protect and build customer relationships by offering their clients any service they require, providing key financial information and analysis exactly when customers need it. The challenge for ever-expanding financial superstructures is not only to develop a system that will get information out to customers, but also push information from data silos and news feeds, for example, to bank personnel so that they can determine the critical data and analysis that their customers really require.
At the end of the day, financial services firms are really information companies. And as the marketplace is further commoditized, the quality and timeliness of information becomes financial companies' most compelling differentiator. "It's a whole new level of competition," says Doug Dannemiller, senior analyst in The Tower Group's wholesale banking and trust group. "It used to be that (financial institutions) competed on local knowledge; now, the trend is competing toward technology. The first step was delivery of information in the format you wanted. Now, the next step is delivering not only the information, but also the tools to analyze it the way the customer wants to analyze it."
To this end, many institutions are looking to "push" technology to enable them to compete in the Information Age. Push technology enables companies to disseminate information and software applications to the desktop. The most famous players in this emerging market are Marimba and PointCast, whose offerings are worlds apart but together span the breadth of what the push industry offers.
Marimba-founded by Kim Polese, former Sun Microsystems product marketing manager responsible for developing Java's identity-creates technology that enables companies to push entire software applications and upgrades through an enterprise intranet, extranet or the Internet out to the desktop. PointCast, conversely, is a PC broadcast system, financed through advertising, that aggregates content from major news sources like CNN and The New York Times, financial sources like Standard & Poors, the Internet and individual corporations. PointCast pushes this content directly to the desktop, where its consumers can "customize," to a certain degree, which feeds they want. A host of other companies are also surfacing to deliver content and software to corporate and consumer desktops, companies like BackWeb Technologies, Wayfarer Communications and Diffusion.
All of these push providers have a place in financial services. Presently, several financial institutions are applying push to their internal operations, communications and wholesale customer support areas, say sources. Early adoption can arguably be attributed to the deep pockets and controlled environments that internal and wholesale banking divisions possess-similar to pioneering investments made with the advent of Java.
And once banks become comfortable with push technology, they will likely expand their use of it into the retail sector, where the benefits of personalized information and applications delivered to the desktop will go a long way in building customer relationships and furthering electronic banking-particularly investment services, bill presentment and bill pay. "So what this all boils down to is the need to deliver interactive, compelling, personalized, customized financial services to consumers," says Marimba's Polese.
One of Marimba's retail brokerage customers-most customers have insisted on anonymity for competitive reasons-has been piloting a portfolio management application that delivers customized content based on a consumer's investment identity. The company pushes out information pertaining to consumers' individual portfolios and alerts them when their stocks hit a certain price or market conditions change relative to their holdings. Meca Software is also making ground in the retail market through its relationship with Marimba and should prove to be a good case study for how push can be used to Webcast home banking applications and personal finance content. DLJ Direct, formerly PC Financial Network, is also reaching out to consumers with push technology via a relationship it's forged with PointCast. DLJ Direct will broadcast investment services content over the PointCast network.
But the most activity in push, by far, is in developing internal and wholesale banking applications. The technology is being used to deliver tools to corporate customers, enabling them to better analyze their financial data; to distribute and upgrade business applications through the enterprise; and disseminate critical information to key areas of the bank and its customer base.
Marimba has several financial services customers that are reaching out to corporate clients and research analysts, delivering services that were never before possible or were an administrative nightmare. One New York-based securities firm, says Randy Skipper, Marimba's director of sales for the east coast, is using the push provider's Castanet product to give institutional investors a tool that pulls live data on bond securities exchange information and runs "what-if" analyses. The challenge in creating such a tool is that the application has to be updated at least every fifteen minutes because securities data is so dynamic. Before Castanet, the securities firm couldn't support the service; with it, the firm pushes that application with live data feeds to corporate desktops. Another securities firm is using Castanet to distribute a calculations management tool to 4,000 desktops within the bond institutional investing group.
But even simple information can be a challenge to distribute. A large bank customer of Marimba's, for example, is using push to distribute research notes to over 200 offices around the world. The challenge was to get the bank's analysts their research notes by 7 a.m.-in their respective time zones and languages. And as this information has to be continuously updated globally, distribution was a nightmare. "The bank was spending in excess of about $2 million a year just trying to keep software maintained and updated," says Skipper. "We were able to build a (prototype) channel that enabled the bank to deliver these reports around the world."
The Chase Manhattan Bank is looking into Marimba for both software and report distribution, says London-based Jason Boud, second vp in the bank's global markets technology engineering group. Although push technology hasn't made it out of the lab, the bank is testing it to update applications for traders, disseminate straightforward information like portfolio analysis, and send complex files like "Net Objects," which enable traders and corporate customers, for example, to view data any way they want, to the desktop.
NationsBank has tested push at a more conservative level-strictly the dissemination of straightforward business information. "We were using it for employees on the intranet," says Emory Simmons, svp, strategic technology group. "It was pushing more important information within the bank and then specifically relative to department groups." Though Simmons would not discuss the push provider, Nations is rumored to have worked with Wayfarer.
Fidelity Investments is working with BackWeb to "deliver real time and business critical information" to its top 100 executives, says BackWeb CEO Eli Barkat. "The strategic value that they saw in push is (in getting) the important, personalized information delivered to the right people in the organization to let them run their business better." Fidelity declined comment.
Not to be outdone, PointCast is making a major play for bank business. Known for its broadcast model, PointCast has, up until now, offered a non-industry-specific connection to a huge variety of content, covering world events, business news, capital markets, entertainment, sports and weather. Individual companies also have been able to broadcast content on the PointCast network. While such a broad spray of information keeps individuals abreast of the times, it's a limited source of information for specific industries.
That's all changing. PointCast, along with KPMG Peat Marwick, is launching "Banker Insider," a version of the PointCast network catering to both large and community banks. Insider will have three super-channels devoted to consumer banking, investment management and capital markets. Within these three segments will be news and information channels focused on technology, marketing, regulatory compliance, etc. KPMG will provide analysis of leading news stories and industry "hot topics." Analysts will even host chat room discussions. And banks can create channels to disseminate information to specific customer and business segments. Says KPMG's Michael Turillo, partner in charge, capital strategies: "By adding commentary, providing focus and direction, we're really able to put some reality to the vision and the expectation people have for all this technology."
-bers tfn.com
